Since 1989, Poland has stood out among the former communist countries as the most successful reformer with the highest cumulative economic growth. It sailed through the global crisis and was the only European Union nation that didn't experience a recession in 2009. It is therefore puzzling that the center-right government of Prime Minister Donald Tusk has proposed a reversal of the country's successful pension reforms of 1999 as a way to reduce the near-term budget deficit. Such a reversal would swiftly reduce pension savings and, therefore, the demand for Polish equities. The current Polish government's inability to manage the country's public finances cannot be repaired or disguised by undoing reforms that work.

The United States is negotiating two mega-regional trade agreements across the Atlantic and the Pacific that could become a template for global trade rules in the 21st century. But members of Congress, citing studies by C. Fred Bergsten and Joseph E. Gagnon, have challenged this agenda by demanding "strong and enforceable" responses to currency manipulation that distorts trade. Bergsten reviews the ways that "currency manipulation" can be defined and offers suggestions on how it can be regulated in the new trade accords. Ignoring the issue could sink trade deals that represent a potentially huge benefit to the global economy.

Ukraine president Viktor Yanukovych has rejected his country's painstakingly negotiated Association Agreement with the European Union. Instead, he is finalizing the terms of a Russian counteroffer of financial support in return for political allegiance. Ukraine will have to accept the need to reform its economy, however, regardless of which political direction it chooses to pursue. Recent experience in Egypt and Belarus, for example, demonstrates that countries that offer the prospect of financial support in return for political fealty often end up pushing for International Monetary Fund (IMF)-style reforms on their ally in any case. The real choice for Ukraine is only between who imposes and enforces reforms and its external orientation.

After a year of economic setbacks, India's economic prospects appear to have improved. The stock market is soaring, foreign money is pouring back in, and the current account deficit has declined. But India's macroeconomic problems, including high inflation, are far from over. They have deeper structural origins in the form of a trilemma, or three-way competing objectives. As a lively democracy with a weak state, India's embrace of financial globalization will make it difficult to maintain economic stability. India can pursue two of these three objectives—competitive and imperfect democracy, global financial integration, and macroeconomic stability—but not all three of them simultaneously.

Europe's effort to establish a banking union has to overcome many doubters, but there is no doubt about its transformative nature. EU leaders have entrusted the European Central Bank (ECB) with centralized authority over bank supervision across euro area countries. This step could reestablish trust in European banks, reboot the interbank market, end dysfunctional credit allocation, and reverse the vicious circle between bank and sovereign credit. The upcoming asset quality review and stress tests of 130 credit institutions (covering 85 percent of the euro area's banking assets) should trigger the triage, recapitalization, and restructuring of the banking system. Doing so honestly, however, poses the risk of confrontation between the ECB and euro area member states. But if the assessment lacks credibility, the reputations of the ECB and Europe itself may be damaged, with dangerous political consequences.

Chicago Public Radio
Russia Offers Economic Support to Ukraine
Anders Åslund discusses the causes behind Ukraine's financial troubles and the announcement that Russia will purchase $15 billion in Ukraine bonds.

Diane Rehm Show
Debate Over Proposed Global Trade Agreements
Simon Johnson discusses the pros and cons of the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership and what lessons can be drawn from NAFTA.